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Brazil wheat imports to hit highest in years, says Conab, cutting hopes for domestic crop

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Brazil’s wheat imports are on course to hit their highest in years, lifted by the disappointing quality and quantity of the domestic crop, Conab said, downgrading again its harvest estimate.

 

The official Brazilian crop bureau raised by 200,000 tonnes to 7.20m tonnes its forecast for Brazilian wheat imports this season – taking them above the 7.09m tonnes imported last season, and to the highest in at least a decade.

 

The revision came as the bureau cut by 269,000 tonnes, to 4.30m tonnes, its estimate for the newly-finished harvest, making it the smallest in 10 years.

 

The downgrade reflected nearly entirely a reduced figure for the harvest in Rio Grande do Sul, the second largest growing state - where production was now estimated at 1.54m tonnes down 38% year on year.

 

‘Severely compromised’

 

Conab cut its estimate for the Rio Grande do Sul to 1.83 tonnes per hectare, down 43% year on year, after a growing season blighted by periods of ill-timed dryness, frosts and heavy rains.

 

“Adverse weather conditions during the whole crop cycle caused the wheat yield and quality to be severely compromised” in the state.

 

Furthermore, the quality of the crop was in the main “very low”, with almost all wheat harvested in the main growing regions coming in with a specific weight of 76 kilogrammes per hectolitre.

 

Only 15% of the Rio Grande do Sul crop was rated as being of food quality.

 

‘Competitive prices’

 

The disappointing Brazilian harvest meant that a downturn in imports last month, when buy-ins tumbled 32% year on year to 476,000 tonnes, was unlikely to set a trend.

 

Conab said it had upgraded its wheat import estimate “mainly due to the competitiveness of the foreign product, and the need to supply grains of higher quality”.

 

Indeed, already in Rio Grande do Sul wheat prices had held steady, despite the poor harvest, as “large volumes imported, mainly from Argentina” weighed on values.

 

Argentina, the default origin for Brazilian wheat purchases, is seen exporting 11.7m tonnes of wheat this season by the US Department of Agriculture, backed by a harvest pegged at 17.5m tonnes – down 900,000 tonnes year on year, but well above the five-year average level.

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